MOSCOW, Feb 8 (Reuters) – Drone attacks and technical outages causing damage to refineries have prompted Russia to export more crude oil than initially planned for February, potentially challenging its commitment to curb sales within the framework of the OPEC+ agreement.
In accordance with the deal struck with the OPEC+ alliance of major oil producers, Russia has agreed to cap its crude oil production at 9.5 million barrels per day (bpd). Additionally, it has voluntarily committed to reducing exports of crude oil and fuel by 300,000 bpd and 200,000 bpd respectively from the average levels observed in May and June.
However, analysts caution that adhering to these commitments may prove challenging for Moscow, as stocks of unprocessed crude accumulate and the country’s refining capacity remains constrained.
The OPEC office in Vienna has yet to respond to inquiries seeking comment on the matter, while Russia’s energy ministry has declined to provide any official statements.
Evidence is emerging of a rise in oil supplies from Russia, with loadings from the ports of Primorsk, Ust-Luga, and Novorossiisk anticipated to increase by approximately 0.7 million metric tonnes compared to the initial plan, reaching 8.2 million tons (equivalent to 2.1 million barrels per day).
Ronald Smith, an expert from the Moscow-based BCS Global Markets brokerage, highlighted the potential for increased crude exports should gasoline and diesel exports contract.
Compounding the situation, the Tuapse refinery located on the Black Sea is expected to remain offline until March due to damage resulting from a drone attack originating from Ukraine, as indicated by sources familiar with the matter.
Further incidents impacting Russia’s energy infrastructure, such as recent drone attacks damaging the Ust-Luga and Volgograd refineries in the Baltic and southern regions of Russia, could also contribute to heightened oil exports in February, according to traders.
Traders and data from LSEG ship-tracking suggest that exports may decline by up to a third, or approximately 127,500-136,000 bpd, while jet fuel exports could see a decrease of around 20,000 bpd.
Alexei Kokin, an industry analyst, warned that if primary processing continues to decline, coupled with unchanged oil production and limited storage capacity, crude oil exports could escalate, potentially jeopardizing Russia’s commitments to the OPEC+ agreement regarding crude oil.